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  3. Earnings Surprise & Price Reaction Analysis

Earnings Surprise & Price Reaction Analysis

Earnings Surprise & Price Reaction Analysis

This page within EDT is dedicated to understanding a stock reaction to earnings; it is comparing reported adjusted actuals to consensus data and make it visually easy to spot trends in beat/miss compared to the disparity of consensus forecasts and how does that translate into a price reaction.

Questions it helps easily answer:

  • historically, if the company beat by X%, how has the price reacted by?
  • and strong was this reaction when the consensus was relatively concentrated vs when the difference between the top and bottom forecast was very wide?
  • How strong is this relationship for Revenue Surprise vs Price reaction, compared to EPS Surprise vs Price reaction?
  • Has it changed over time or the relationship relatively stable over time?

Earnings Surprise Graph

The earnings surprise graph shows the stock price and consensus min, max, and mean compared to actuals which help assess how spread or concentrated the consensus range is over time, as well as how close consensus is to actual results;

The graph also comes with a secondary bar chart with the price reaction.

Price reaction table

The core table of the feature shows a metric along with 

  • Period Name (e.g. 1Q20): the name of the fiscal period
  • Announcement Date: The date of the earnings announcement
  • Metric Actual: the adjusted actual figure reported by the company
  • Consensus: the value of consensus at the time of earnings
  • # Estimates: the number of contributions to the consensus estimate
  • %Beat/Miss: the % amount of surprise of actuals vs consensus
  • Price reaction: the % change in the stock price in the day following the earnings announcement  (same day when the company reported before market open or intraday)
  • Low / High: The minimum and maximum sell-side forecasts included in the consensus poll.

Dashboard Widget

Earnings Surprise is also available as a Dashboard widget; please look for “Earnings Surprise Trend” in the widget library.

 

Updated on December 16, 2020

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